EU approves state aid for Polish shipyard

23rd July 2009, Comments 0 comments

As the birthplace of the Solidarity trade union, the Gdansk yard played a key role in freeing Poland from communism, acquiring huge symbolic importance in the process – all of which complicated efforts to find a solution to its future as a business.

Brussels -- EU regulators approved Wednesday major state aid for Poland's historic Gdansk shipyard, ending years of wrangling and ensuring the future of the birthplace of the Solidarity trade union.

The European Commission, which polices competition, said it reached the decision after the Polish government submitted a plan to ensure the long-term future of the site, ending one of its toughest cases ever.

"This has been one of the longest and most difficult cases I have had to deal with," EU Competition Commissioner Neelie Kroes said. "But I am very pleased that we have now found a constructive solution for this exceptional place and the people working there. Genuine restructuring is the only way to secure stable jobs for the yard's workers."

The commission said it had authorised "various support measures worth 251 million euros (356 million dollars), spread over several years and extending into the future, in favour of the Gdansk shipyard."

It concluded that Warsaw's plan "will ensure the viability of the yard and that the distortions of competition, caused by years of subsidised operations, will be adequately reduced by production capacity closures."

Subsidies had distorted competition in Europe's shipbuilding market and therefore production at Gdansk would have to be reduced substantially, it noted.

Under the restructuring plan, the yard will close two of its three slipways.

The Gdansk yard as the birthplace of the Solidarity trade union played a key role in freeing Poland from communism, acquiring huge symbolic importance in the process which complicated efforts to find a solution to its future as a business.

The yard was sold to Ukrainian group Donbass in 2007 but Brussels and Warsaw have before and since argued over the level of state aid involved in keeping the business afloat.

The commission's inquiry began in 2005 into public aid handed over to Poland's three major shipyards, Gdansk, Gdynia and Szczecin, all on the country's northern Baltic coast.

In November, Brussels ordered Poland to sell Gdynia and Szczecin after ruling Warsaw had doled out illegal state aid to keep them in business. They were sold in May for around 82 million euros to Qatari investment fund Qinvest.

In 1980, the Gdansk shipyard on Poland's Baltic Sea coast was the breeding ground for the militant Solidarity trade union, the first and only one of its kind in the entire Soviet bloc.

A strike turned Lech Walesa, a shipyard electrician and Solidarity founder, into an international figure and swelled an opposition that helped speed the demise of Poland's communist leaders in 1989 and of the communist bloc overall.

In late April, Walesa appealed for the yard's future to be assured and hundreds of workers there clashed with police over fears for their jobs.

"This is the first monument to the magnificent struggle which allowed us to think about German reunification, the reunification of Europe and globalisation," said Walesa, who later became Poland's president and won a Nobel Peace Prize.

"Doesn't this great monument deserve great support, so we can preserve it for future generations," he said at the time.

AFP/Expatica

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